Sustainability accounting
Full Cost Accounting
An accounting approach that identifies and sums all costs of a product, service, or activity — direct, hidden, contingent, and social or environmental — rather than only conventional cash costs.
Definition
Full cost accounting is a systematic approach to identifying, summing, and reporting the actual costs of a product or activity, including operating, capital, future, overhead, and hidden costs that conventional accounting overlooks. Popularised in the US EPA's 1997 handbook for municipal solid waste, it is used more broadly to bring environmental and social costs into financial decision-making.
References
definition and cost categories
Overview
What it means
Conventional accounts show what an organisation pays; full cost accounting asks what an activity actually costs, including costs shifted to future budgets, other departments, or society. In waste management it revealed the true per-tonne cost of disposal versus recycling; in sustainability it underpins the case for internalising externalities.
How it is used
Municipalities use FCA for service pricing and pay-as-you-throw systems; companies apply it in environmental management accounting; and the concept connects to true-cost accounting and natural-capital valuation.
Why it matters
Decisions made on partial costs systematically favour polluting options; full cost accounting is a practical bridge between financial accounting and sustainability economics.
Review
Public comments appear only after editor acceptance. Draft comments stay in the review queue.
Reviewers choose the definition or an overview paragraph, leave a comment or replacement, and attach evidence or a source link.
Editors compare reviewer cards side by side. AI may help find agreement, conflicts, unsupported claims and possible source issues.
Only an editor-accepted synthesis changes the public page. Reviewer identities are shown only with consent and an editorial decision to attribute them.
Submitted reviews stay private until an editor decides whether to accept and attribute them.
Contribute to this entry
Help improve this definition
Your contribution is private while it is checked. Nothing changes on this page unless an editor accepts it.
Loading verified endorsements… Endorsements are not votes and never determine publication.
Endorse this definition
Endorse the exact version shown here. This is not a vote, and publication remains an editorial decision.
Review board
Comment on a specific line. Each reviewer stays separate until an editor accepts a merged draft.
Each person comments on the definition or overview in their own draft card, with role, evidence and suggested wording kept together.
AI can compare comments against the current text, flag conflicting claims, surface missing evidence and identify where reviewers agree.
An editor merges compatible suggestions into a draft change, checks sources, records disagreements and decides what can be published.